Some pesticide companies use big launching events with raffle draws, free gifts and free handouts to promote products. The companies invite hundreds of farmers from various villages and farmer-groups to attend these events often decorated like a fair with various advertised-media while also and also dance performances and amusements for local people. Such events are often attended by government officials giving speeches for endorsements.

In addition to launching events, some companies use a large network of dealers and retailers. The retailers (kiosk) are often aggressive in supervising and influencing farmers buy particular products because of lucrative sales incentives. Companies also provide them free products to be used in their own fields as demonstrations. Free products for demonstration plots are provided directly to the farmers as well. The network of dealers in each provincial office is built up by setting up at least 1 dealership at the regency level (D-1) with the main purpose to distribute products to the Retailer 1 (R1), Retailer 2 (R2), and Retailer 3 (R3). Retailers from R2 and R3 often use their residence for pesticide storage and sales. It is common to see pesticides being stored in the garage, front terrace, or in the shop-room which are near to sitting room. They do not have special store to keep pesticides in their residence.

R2-level has the responsibility to cover two districts (kecamatan) products to R3. R3 distributes the products to the villages. The hierarchy of retailers is strictly observed. For example, R3 is not allowed to purchase products directly from R1, bypassing R2. This is because of the price structures at different retailer levels. Retailers have high incentives to increase their sale targets as they can ascend to the next level.

Close relationships with retailers and rewards as incentives

Pesticide companies maintain close relationships with retailers. Some are used as “cases” for the local company executives to show off to headquarter marketing directors. They receive special attention and gifts, including a First-Aid Box with company logo, boxes of vitamins, fruits and even sets of equipment for Islamic prayers.

First aid box in dealer’s house provided by the company

Rewards and price incentives are given to retailers. For instance some retailers have electronic equipment and even home furniture as rewards. The sales of a ton of products would normally qualifies for “small” prizes, such as cell phones, digital cameras, radios and DVD players. Retailers can accumulate the rewards points to qualify for the “bigger” prizes, like refrigerator, LCD TV, and washing machine. Sometimes the reward points may be exchanged for cash. More valuable rewards are in the form of cars, tractors, and transportation costs to go abroad, including to Mecca for a pilgrimage or Haj. Free trips to domestic tourist destinations are often organized for the retailers’ families in regular activities.

One thought on “Corporate marketing strategies of pesticide companies in Indonesia”

Yes, these activities of pesticide companies are also the same in Vietnam because they are also the trade companies, and so they must do all methods of PR to promote their sales. However, the role of the government and related departments is very important to regulate the right use of these products.

In VN today, there are many companies with many products were allowed to register by the government and they are very attractive to farmers. So we try to develop many methods of pest management under the IPM principles and implement at farmers’ fields at the community level to convince them. And at this moment we have some good results for rice production, for some orchards but very difficult for vegetables because the common consumers now do not pay attention to the toxic effects of pesticide residues. We are carrying out step by step some measures to regulate the sale and advertisements of pesticides and look promising.